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Northland Capital Partners View on the City Pendragon Group

Northland Capital Partners View on the City Pendragon Group

Pendragon PLC (LON:PDG): Trading Statement

Market Cap: £526m; Current Price: 36p

  • Good performance in the 1Q15 
  • Strong performance from PDG where underlying profit before tax was +10.4% YoY on the back of not only an increase in online visits to, and +25.6% in the quarter but also the new ‘click and collect’ service which launched in February has helped used vehicle sales increase by over 8%, outperforming the market. 
  • Aftersales gross profit was +3.6% on a l-f-l basis on the back of technology enhancement. Used vehicle gross profit was +2.9% on a l-f-l basis which included benefit from the ‘click and collect’ service whilst new vehicle sales gross profit was +9.9% on a l-f-l basis as the business benefited from double digit revenue growth in Evans Halshaw and Stratstone.
  • Balance sheet remains in strong shape where underlying net debt to EBITDA ratio remains below the target range of 1x to 1.5x. The outlook remains positive and given the strong start to FY15 management are comfortable in meeting expectations. Consensus PBT forecasts imply 7.5% PBT growth for FY15 to £64.7m, however given that the 1Q15 was 10.4% or 300bps higher we expect there should be positive changes to forecasts.

NORTHLAND CAPITAL PARTNERS VIEW: The share price has been slightly weaker in recent months down c.12% since the early part of March. Today’s news should be well received so we expect the shares to trade well today. The stock trades on c. 11x FY15 consensus earnings which does not appear demanding in our view and with potential upgrades to follow the multiple looks less demanding. A prospective dividend yield of c. 3% doesn’t appear overly attractive. However, investors should be encouraged by the performance in the early part of FY15.

1. Northland Capital Partners Limited (“Northland”) acts as Nominated Advisor and/or Broker to the company.

2. Northland) and/or its affiliates companies do beneficially own 1% or more of any class of the issuer’s equity securities, as of the end of the month immediately preceding the date of issuance of the research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month. 

3. The authoring analyst or any associate of the authoring analyst does maintain a long or short position in any of the issuer’s securities directly or through derivatives, including options or futures positions.

4. Northland, its affiliated companies, partners, officers, directors or any authoring analyst of Northland has provided services to the issuer for remuneration during the preceding 12 months other than investment advisory or trading services.

5. Northland or any of its affiliated companies has performed investment banking services for the issuer during the 12 months preceding the date of issuance of the report.  

6. A partner, director, officer, employee or agent of Northland or any of its affiliated companies is an officer, director, employee or advisor of the issuer.  Disclosures are applicable for all companies

7. The authoring analyst, or any associate of the authoring analyst, has viewed the material operations of the issuer. 

8. The authoring analyst, or any associate of the authoring analyst, received reimbursement for travel expenses.

9. Northland makes a market in the securities of this company.




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The past is not necessarily a guide to future performance. The value of shares and the income arising from them can fall as well as rise and investors may get back less than they originally invested. The information contained in this document has been obtained from sources which Northland Capital Partners Limited believes to be re¬li¬able. The Com¬pany does not warrant that such information is accurate or complete. All estimates and prospective figures quoted in this report are forecasts and not guaranteed. Opinions included in this report reflect the Company’s judgement at the date of publication and are subject to change without notice. If the investment(s) mentioned in this report are denominated in a currency different from the currency of the country in which the recipient is a resident, the recipient should be aware that fluctuations in exchange rates may have an adverse effect on the value of the investment(s). The listing requirements for securities listed on AIM or PLUS markets are less demanding, also trading in them may be less liquid than main markets.

Northland Capital Partners Limited and/or its officers, as¬sociated entities or clients may have a position, or other material interest, in any securities men¬tioned in this report. Northland Capital Partners Limited does not provide recommendations on securities of firms with which it has a corporate relationship. More information about our management of Conflicts of Interest, Investment Research Methodology & Definition of Recommendations can be found at 

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